This Warren Buffett Stock Is Spiking Higher Today — Here's Why
The stock market was having a strong day on Thursday, but Sirius XM (NASDAQ: SIRI) was an outperformer. As of 10:10 a.m. ET, the stock was higher by about 6% for the day.
Sirius XM reported its fourth-quarter and full-year 2024 results on Thursday morning, and the short explanation is this is the driving force behind the move in the stock. The company beat expectations on both the top and bottom lines, but looking beyond the headlines, there’s a lot to like.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »
Strong results, especially for profitability
For one thing, self-paying subscriber additions were strong. While the total number of self-pay subscribers declined year over year, the company added 149,000 in the fourth quarter, significantly more than in the same quarter in 2023.
Additional highlights include:
-
Sirius XM’s cost savings initiatives are progressing as planned, and the company aims for another $200 million in annual savings by the end of 2025.
-
Free cash flow increased 28% year over year in the fourth quarter.
-
Programmatic podcast ad revenue grew by a “double-digit” percentage in 2024.
Sirius looks extremely cheap
Sirius XM also confirmed its full-year 2025 guidance for $8.5 billion in revenue and $1.15 billion in free cash flow. At the current price, this means that Sirius XM is trading for less than 7 times expected free cash flow, a remarkably low valuation. With several exciting initiatives designed to reinvigorate growth, this stock has attracted a big investment from Warren Buffett-led Berkshire Hathaway, which owns a 35% stake. It could be a steal if management can execute on its strategy and can achieve its goal of $1.5 billion in free cash flow by 2027.
Should you invest $1,000 in Sirius XM right now?
Before you buy stock in Sirius XM, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sirius XM wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $758,099!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of January 27, 2025
Matt Frankel has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.